FTC Testifies to Its Accomplishments at U.S. Senate Oversight Hearing

The five members of the Federal Trade Commission appeared today before a U.S. Senate Subcommittee to reiterate their support for the FTC’s proposed reauthorization. In highlighting the Commission’s recent activities, Chairman Robert Pitofsky said that “the reauthorization of the Federal Trade Commission is consistent with the goals we all share in preparing ourselves for the 21st Century and an era of leaner government.” Pitofsky described the Commission’s efforts to eliminate unnecessary business burdens, target limited enforcement resources at critical issues facing businesses and consumers today, and prepare for the future.

Stressing that the Commission is first and foremost a law enforcement agency, Pitofsky said that the FTC “exists to ensure consumers the benefit of a vigorously competitive marketplace; it does not seek to supplant competition with regulation.” Commissioner Janet D. Steiger, who served as Chairman of the Commission from 1989 to 1995 added that “there is a solid bipartisan consensus at the Federal Trade Commission in support of a vigorous judicious program of law enforcement.” Steiger also said that the FTC continues to do more with less, particularly through cooperative efforts with our regional offices, the states, the business community, and consumer groups.”

The Commission testified that through two complementary yet different approaches, the FTC, the nation’s only consumer protection agency with general jurisdiction, has pursued its goal of promoting healthy competition. First, through its consumer protection activities, the agency “seeks to ensure that consumers receive accurate, not false or misleading information in the marketplace,” the Commission said. For example, the FTC said, it recently led Project Telesweep, a federal-state effort that resulted in approximately 100 court actions against fraudulent telemarketers engaged in business opportunity fraud. Another federal-state enforcement sweep targeting fraudulent credit repair telemarketers, called Operation Payback, was part of the Commission’s effort to implement the Telemarketing Sales Rule. The implementation of the Rule, one of the Commission’s highest priorities, also has led to crackdowns on telemarketers peddling fraudulent high-tech investments and on telemarketers who target older Americans. These efforts, and other consumer protection initiatives have resulted in court-ordered redress of more than $100 million against fraudulent telemarketers and returned more than $30 million to victims of these and other con artists over the past two years, the Commission added.

In delivering the Commission’s testimony, Pitofsky highlighted the second way in which the agency achieves its goal of promoting healthy competition. “[F]or consumers to have a choice of products and services at competitive prices and quality, the marketplace must be free from anticompetitive business practices,” he said. Antitrust enforcement “prohibits anticompetitive mergers or other anticompetitive business practices without interfering with the legitimate activities of businesses.” During a time that the United States is undergoing a merger wave of unprecedented proportions, the Commission stated that it has taken “action in a wide range of industries--including health, defense, computer software, natural gas transportation, cable television, chemicals, supermarkets, and funeral homes--to ensure that merger transactions would benefit rather than harm consumers.” The testimony refers to the recent decision to block the merger between two of ?the largest drug store chains in the country that would have resulted in higher prescription drug prices for consumers.

These activities are undertaken in an agency with approximately 950 full-time equivalent employees. The Commission pointed out that it “has been a leader over the past 15 years in demonstrating how government can do more with less. Each year consumers save an amount that far exceeds the Commission’s annual budget in the form of consumer redress, civil penalties, and competitive prices. In short, we believe consumers earn a significant return on their investment from the Commission’s law enforcement actions.”

The FTC said it had taken numerous steps in order to maintain this level of productivity. The Commission detailed how the agency has eliminated unnecessary burdens by ensuring that outdated regulations or policies affecting businesses are eliminated; targeted resources at critical issues and leveraged resources through joint initiatives with states, businesses, and public groups; and prepared for the future by keeping abreast of and planning for the dramatic changes in the marketplace.

The Commission vote to approve the testimony was 5-0.

Copies of the Commission’s testimony are available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC’s World Wide Web site at: http://www.ftc.gov